Four Keys to Managing Change

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Though this is written primarily for financial advisors, the principles apply to any business in any industry and provides readers with a simple four-part model to consider when undertaking a change initiative of any size. Using this model as a guide throughout the change process will greatly improve the chances of having a successful, satisfying outcome, whether you are “transforming” or “tweaking” your organization.  

Living, as they do, in the world of numbers financial advisers should be cautious when attempting to change their practice. Whether restructuring the entire operation or improving the way clients are greeted, 70% of their efforts will fail.

The solution, of course, is to avoid change. Or, if that’s not possible, to at least learn from our failed efforts so that we won’t repeat our mistakes. Unfortunately, it isn’t. And we don’t.

John F. Kennedy observed, “Change is the law of life.” And this law touches every adviser. A new client changes the practice. A new employee changes the office. Computer and software upgrades change work flows, habits and efficiencies and can cause excess drinking.  This “law of life” is consuming.

And at times, frustrating.

Whether attempting to “tweak” or “transform” their practice, a four-part model for approaching change will help advisers assess the situations they will encounter throughout the process so that they will obtain the results of their efforts.


Until the benefits of the change initiative are understood, the process should be avoided. Otherwise the practice will struggle to accept the new standards, systems and – if appropriate – rewards that are a part of the transformation.

A few years ago we led the restructuring of a highly visible and successful financial advisory firm. At the time they were managing over $500 million in assets and were generating about $5 million in annual revenue. Not surprisingly, they had outgrown their operational structure.

We decentralized the firm by implementing an ensemble practice model of several Advisory Teams, each one led by a Senior Adviser. This improved client service and increased the number of referrals. Since the new structure was scalable, new Advisory Teams were formed to support the firm’s continued growth.

Throughout the change process we talked about the expected benefits including improved client service, scalable growth and professional development. We continued to talk as we implemented new procedures, including a firm-wide compensation program.

In short, we made certain everyone knew why the firm needed to change, what these changes would look like and how those inside the firm would be rewarded as they contributed to its success.



By definition, any change initiative will disturb the equilibrium of individuals or teams or even of the firm itself. For most, the uncertainty of change can feel threatening, particularly when it includes new roles and responsibilities. In any change program, conflict should be expected. Not welcomed, but at least anticipated.

When engaged as the Interim-Chief Operating Officer of a financial practice we were asked to review and make changes to many of the firm’s internal processes, including the performance standards of its staff.

The reaction was almost immediate. One of the managers complained about his new job description. Over time, he had taken on number of roles which made it difficult to measure his performance or hold him accountable. He was upset because he was now expected to do– as far as I could tell – the job he had been hired to do. Two weeks later, he quit.

Though extreme, the conflict was forgotten as the benefits of the change program began to take hold.



Louis Gerstner said, “I came to see in my time at IBM that culture isn’t just one aspect of the game. It is the game.” Knowing how the game is played, how the culture is managed, will determine whether your change initiative will succeed or fail.

An organization is like an iceberg. The top – what sticks out above the water – describes “how we do things around here.” These actions are easily seen and measured.

Beneath the surface are the organization’s beliefs, values and priorities. Together, they determine both “what we’re doing around here” and, “what we’re not doing.”

We were the Interim-CEO of a successful service business that had stopped growing. The company was hierarchical and rigid. Managers obsessed about what was going on inside the business and used their positions, procedures and production goals to maintain order. “What they did” was drive by what they could control.

In this type of culture, change is threatening. We started with “short-term wins” (using Kotter’s terminology). We took measured risks. We looked outside, rather than inside, the business to determine where to improve. We celebrated victories and learned from mistakes. We extended both encouragement for those who did well and grace to those who tried.

And the company grew. In part because the culture became more innovative, more willing to risk and more flexible; qualities needed to grow the business.



Ultimately, changing an organization involves leadership.

In his book, Leading Change, John Kotter wrote, “change, by definition, requires creating new systems and institutionalizing new approaches.” These can only happen with the leader’s full support and engagement.

Webster defines a catalyst as “an agent that provokes or speeds significant change or action.” No one fills this role as effectively as those responsible for initiating the change program, usually the firm’s top leader(s).  By encouraging their staff throughout the change process the entire firm becomes more engaged and aligned. Qualities that are essential for the program’s success.


It is inevitable. At some point advisers will face this new “law of life” and will need to change – either in part or in whole – their practice. By using this four-part model throughout the change process, the decisions and activities made throughout the program will produce the results promised from the start.


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